THE MACRO
The market only responds to reality. And right now, reality is sending mixed signals. The jobs number came in ugly. A war just broke out in the Middle East. The government is cutting, or at least claiming to. And the smartest money manager alive is sitting on nearly $400 billion in cash. Here's what it means for your portfolio.
What’s Inside ↘
Jobs Report (February)
The War on Iran
DOGE & Government Spending Cuts
Warren Buffett's Cash Pile
Investor Lens
Recent Buys and Add Ons
February Jobs
This report was bad. The economy didn't just slow down, it shed nearly 100,000 jobs. Unemployment climbed to 4.4%, and over the last three months we're averaging less than 6,000 new jobs per month. We're officially stagnant.
Health care had been carrying the labor market for two years straight. In February, even that turned negative due to the Kaiser Permanente strike
The silver lining: those workers are back on the job, giving March a built-in bounce, and wages are still growing
Government jobs continue to bleed, with total losses north of 330,000 since late 2024
Bottom Line: If the labor market doesn't bounce back in the next report, we're heading into an environment where the Fed cuts rates not because inflation is under control, but because the economy is slowing down.
The War on Iran
On February 28th, the U.S. and Israel launched joint strikes on Iran. What followed was immediate…
Iran shut down the Strait of Hormuz, which carries 20% of the world's oil supply
Oil crossed $100 a barrel for the first time since Russia invaded Ukraine, briefly touching $119. Currently down to $87
Gas prices jumped nearly 50 cents in a single week
Some analysts are calling for $150 oil by end of March if nothing changes
The good news: markets rallied when Trump signaled the war could be near an end. Historically, markets are higher six months after nearly every major geopolitical shock, and the U.S. being a net oil exporter puts us in a stronger position than most.
Bottom Line: The real danger isn't the short-term spike. It's a prolonged disruption that reignites inflation just as the economy is softening. Rising prices plus slowing growth is the scenario the Fed has no good answer for.
Defense is the obvious winner here. Energy is complicated. Tread carefully.
DOGE & Government Spending Cuts
DOGE has been loud. The results, not so much.
Claimed savings of $105 billion sound big until you realize that's roughly four cents saved for every dollar spent since October
Social Security, Medicare, and interest on $36 trillion in debt remain completely untouched
The real opportunity is in tackling fraud, which has barely been addressed
The conversation around efficiency is long overdue, and any real reduction in waste is a step in the right direction.
Bottom Line: This doesn't move the needle on America's debt problem. A country borrowing at this pace during a war that's spiking oil prices will eventually face higher interest rates and a weaker dollar. Slow moving story, but keep it on your radar.
Warren Buffett’s Cash Pile
Berkshire Hathaway is sitting on nearly $400 billion in cash. That should make every investor think.
Buffett spent two years selling slowly, trimming Apple, exiting Bank of America, stepping back from almost everything while markets kept climbing
On January 1st, he handed the reins to Greg Abel, who now controls when that cash gets deployed
So far Abel is doing exactly what Buffett did. Nothing.
The S&P 500 sits at roughly 31 times earnings, historically expensive
That $400 billion is actually a bullish signal for patient investors. When it starts moving, it could fuel one of the great buying opportunities of the decade.
Bottom Line: When Berkshire's cash finally gets deployed, it usually means one thing. Prices have come down and there's opportunity in the streets. Build your watchlist now. Know what you'd buy at the right price. When they start swinging, you want to be positioned.
The Investor Lens
This isn't typical market noise. We have a war disrupting global energy, a jobs market stalling, and the world's most disciplined investor sitting on the sidelines.
Keep some cash. If Berkshire isn't fully deployed, you don't need to be either
Energy and defense are worth a look, but be selective
Don't panic. Volatility is the price of admission
Keep looking for great compounding businesses.
The investors who win long-term aren't the ones who called the bottom. They're the ones who stayed calm and were ready when the opportunity showed up. The U.S. economy has absorbed wars, pandemics, and financial crises before. Discomfort is usually where the best opportunities are born.
My Recent Buys
➡ HOOD
➡ IREN
➡ COIN
My Recent Add Ons
➡ META
➡ NOW
➡ LLY
➡ PLTR
* Remember, everything I do is Long-Term. Some positions I have are new and some I’ve been in for a while. Invest based on your thesis and plan.
Happy Investing,
Ralph D.
